NASA LaRC Internal File: Human Capital Instructional

Editor’s note: The following file in online on LaRC’s internal website. File name: HUMAN CAPITAL Instructional 2-16-05.doc

Human Capital Assumptions

(1) General

The business base shall only include “known” and “probable” programmatic work and does not include any uncovered capacity in personnel and facilities for FY 2007 and beyond. Costs previously allocated to Center G&A for uncovered personnel and facilities for FY 2007 and beyond have been returned to programs. Budgets and associated FTE for uncovered personnel shall not be resubmitted in Center G&A nor as unfunded FTEs. Center FTE levels will be adjusted to reflect funded levels.

(2) Changes in Workforce

The Agency has outlined a comprehensive plan for addressing the unfunded capacity at the five Centers (ARC, LaRC, GRC, DFRC, and MSFC) involved with the goal of eliminating the uncovered capacity by FY 2007. This plan includes buyouts, voluntary reassignments, directed reassignments, in-sourcing of work previously performed by contractors, furloughs, and finally Reductions-In-Force. Costs of the planned actions such as buyouts, reassignments and RIFs will have to be factored into the institutional budget.

The five affected Centers have already conducted buyouts/early outs in FY 2005, and have the approval of OMB and OPM. It is expected that these five Centers will conduct another round of buyouts/early outs between now and April 3, 2005. In addition, all other Centers will be allowed buyout/early outs between now and April 3, 2005. Budget baselines should include assumptions relative to these buyouts and additional buyouts in FY 2006 and be factored into the Center submissions. The cost of these buyouts should be charged to the same category that the employee’s salary is charged.

The second activity will be Job Fairs held by the unaffected centers at the centers with unfunded capacity to try to interest the employees at the affected centers in voluntary transfers. To this end hiring restrictions are in place for both unaffected centers as well as those with unfunded capacity. The unaffected centers may only fill jobs with current NASA employees and the centers with unfunded capacity may only fill jobs from within their center. Since this may increase the number of transfers planned, the additional Permanent Change of Station costs should be factored into institutional budgets.

After the Job Fairs and resulting voluntary transfers have been completed the Agency will implement an Agency-wide process to match employees in surplus positions to vacant positions at other Centers. Unaffected center management will identify positions available to be filled by directed reassignment. Then, center management at the affected centers, in partnership with HR offices, will identify employees whose positions have been identified as surplus. Employees at the center with unfunded capacity with the critical competency required for the position at the unaffected center will be queried for volunteers to be reassigned. If there are no volunteers a process will be used to identify employees for directed reassignments. Again, any additional PCS cost should be factored into the institutional budget.

Reassignment of Civil Service FTE to previously contracted work would be the next step. This step should only be considered: 1) if an existing contact performance period has ended and options have not been exercised, 2) prior to initiating new tasks or expansions of existing tasks on existing contracts. In either case, a business case determination must also be made that in-house performance is cost effective.

The last activity, if necessary, will be reductions-in-force with the goal of having all the unfunded capacity off the rolls by August 6, FY 2006. Employees separated under reductions-in-force will receive not only a lump payment for their annual leave but may also receive severance pay which may be substantial depending on the age and length of service of the separated employee. In addition to possibly being a substantial amount, this severance pay will be paid out over bi-weekly pay periods just as though the employee were still employed. This means that your FY 2007 institutional budget will have to reflect this additional cost. You may exceed your Center G&A controls, in FY07 only, for this purpose. The following is a summary of the basic severance pay rules and representative examples.

Basic Severance Pay Rules:

First ten years of serviceOne week of current salary for each yearAll years of service over tenTwo weeks of current salary for each yearFor every year over forty years of age.
Ten per cent (10%) of the total for items 1 & 2 above
The total salary payout is limited to one year of current salary. Costs in the table below do not include lump sum.

Employees are not eligible for severance pay if they are eligible for immediate annuity upon retirement including early out eligibility. (Early out eligibility: 25 years of service at any age or 20 years of service and age fifty.) Employees currently receiving a military retirement annuity are not eligible for severance pay.

Using these rules would yield the following examples:

Severance pay, including any lump sum payments should be budgeted in the Center G&A account. A separate line will be added to capture those costs and Centers may exceed their Center G&A controls for that purpose in FY07 only.

(Verify this is consistent with final language in the IFG)

Again, Centers your final personnel and related budget should have no unfunded FTE beginning in FY 2007.

Although buyouts, directed reassignments and RIF’s should not affect employees that are designated as having critical competencies identified under the Competency Management System, it is possible that, due to dramatic program reductions, there may be too many employees with a particular critical competency at a center. In this case, the same effort should be taken to remove them from the roles by the end of FY 2006. In no case will possessing a critical competency be a reason to carry unfunded employees in center G&A.

Since furlough is merely a temporary cost savings and does not permanently address the problem of unfunded capacity, it would be inappropriate use in FY 2007 through FY 2010. However, it may be necessary to have a brief furlough in FY 2005 or FY 2006 if the agency cannot meet its financial obligations and meets the furlough criteria. Furloughs may be included as a part of your baseline Institutional submit. If the Center elects to make use of this tool, the assumptions and impacts must be recorded in the format provided for that purpose.

A furlough is an action taken by an agency to place an employee in a temporary status without duties or pay because of lack of work or funds or other nondisciplinary reasons. Furloughs may be made for periods of up to one year. The process of furloughing employees for periods of 30 days or less is different than that for processing furloughs for more than 30 days. Management determines which employees are to be furloughed for periods of 30 days or less. Reduction of force procedures are used to identify employees being furloughed for periods of more than 30 days but less than one year. In both cases employees receive advance written notice of the furlough and are provided an opportunity to reply prior to effecting the furlough. However, for furloughs of 30 days or less and advance written notice and opportunity to answer are not necessary when the furlough is due to unforeseeable circumstances, such as sudden breakdowns in equipment, acts of God, or sudden emergencies requiring immediate curtailment of activities.

Employees who are actually furloughed may appeal that action to the Merit Systems Protection Board.

Exercise of a furlough may occur only after written approval of the Institutional Committee.

(3) Transition Account

The proposed FY 2006 Transition Account has been eliminated. In FY 2006, the FTE allocated to that account, and all FTE associated with terminated projects, have been transferred to Center G&A. The funding controls have already been adjusted to reflect this transfer. Centers will need to correct the FTE in their Center G&A to accommodate this direction.

(4) Termination, Rescoping or Descoping Assumptions to be Utilized in Formulating the FY 2007 Budget

Directorates that have future reductions to projects contained in the President’s FY 2006 Budget are responsible for funding their portion of the Center G&A, service pools, and direct personnel through the end of FY 2006. There will be no termination liability coverage provided beyond FY 2006. {We need to specify what this means and to be sure that we clarify responsibilities for capacity uncovered in the process of finalizing the FY06 budget}

(5) Salaries

FY 2007 budget formulation shall assume the following pay changes:

• An Additional Pay Raise of 1.5% in January 2005 (in addition to the 2% assumed prior).
• Combined General & Locality Pay Raise
• For FY 2005, assume a 3.5% pay raise including locality pay.
• For FY 2006 through FY 2010, assume a 3.4%. These include both pay raise and locality pay.
• FY 2011 guidance is a 3.5% increase over FY 2010 to account for pay raise and locality pay.
• SES Pay

Factor into estimates a 2.5% increase in FY 2005 for all SES rated fully successful or higher. In addition, NASA now has the authority to implement additional SES raises based on outstanding performance ratings, recommendation of the Senior Executive Committee and the approval of the Administrator. Center HR offices should be aware of any promotions greater than 2.5%.

(6) Workyears – (FTE & FTP/FTEs)

The Mission Directorate HCE will control and monitor the Center levels (HQ personnel levels are set by the NASA Operations Council) for both the FTP/FTE and overall FTE usage. Since there is no longer an external control on the overall FTE level, the Mission Directorate may increase the overall FTE levels for their Centers by increasing the OTFTP/FTE level as long as they are funded through either a specific program or Center G&A. Detailed baselines will be provided in the Final Guidance. Although not to be included in the Center G&A budget, any displaced Center FTE and support costs above those baseline levels are to be separately identified with the center institutional submission on the provided issues format.

(7) Training and Development

The Agency’s Training and Development budget supports a suite of programs and activities that serve as the linchpin of the Agency’s culture and leadership transformation efforts. The key outcome of this program is the development of the best and brightest leaders for the Agency, with a broad, One NASA perspective, who are prepared to move into the right positions at the right time to accomplish the NASA vision and mission. Funding guidance provided presumes that Centers will align and prioritize their investments based upon these initiatives in continued support of the President’s Management Agenda and the Agency’s culture and leadership transformation,

(8) Travel

In the spirit of full cost management, NASA has been granted relief, from limitations on travel expenditures; however, appropriations limitations and good management practices still apply. While this means that the Agency has the flexibility to transfer funds between program funds and travel funds, program funds must first be transferred to the travel account in the appropriate Appropriation account and then must be accounted for as travel funds.

In order to assure that we are using this flexibility to our best advantage and to not create unnecessary operating plan notification to Congress, Centers must institute appropriate internal review and approval processes to identify any need for additional funding, along with the source of funds to their Mission Directorate HCE. The Mission Directorate HCE will coordinate the reprogramming with the affected Mission Directorates and the Institutional Management Division. Institutional Management Division and Office of the Chief Financial Officer will make the operating plan changes, including any necessary notification. Planning rates for e-travel implementation are provided in the OCIO IT POP Guidance which is located in the Center G&A Folder.